7 Home Buying Myths

It’s no secret that buying a home is a complicated process—hence the importance of working with an experienced Realtor. However, regardless of whether buyers are just starting to look or have been searching for a while, I’ve found that many operate under several misconceptions which can have an impact on the type of home they wind up with.

1. PRE-QUALIFICATION AND PRE-APPROVAL ARE THE SAME THING – While similar, these two terms mean very different things. Although some people have a tendency to use them interchangeably, they represent the difference between looking for a home and actually closing on a home.

To get pre-qualified, you will have to find a lender and provide them with your basic information, which usually includes documentation about your income, debts, assets, etc. This will allow them to make a decision about what type of loan you qualify for; however, you are not pre-approved for said loan until the lender is actually ready to give you the money. Much like landing a job, your lender will require time to verify the information you’ve provided and will need to evaluate your mortgage application, credit rating, and general financial background.

2. YOU NEED 20% DOWN – While this is true more often than not, especially when looking into conventional loans, mortgages come in all shapes and sizes. Instead of assuming that you need to go the standard route, have your Realtor make a few recommendations of reputable lenders and work with them to see if you qualify for down payment assistance or an FHA or VA loan. Some of these programs may allow you to put as little as 3.5 or 0% down, which can obviously be a big help if money is an issue.

3. YOU NEED EXCEPTIONAL CREDIT – Although a great credit score will go a long way towards securing a favorable mortgage rate, a less than stellar report won’t necessarily preclude you from being offered a loan.

Clearly, it’s wise to put some effort into repairing any past blemishes; however, while conventional loans may be difficult to obtain, things like FHA loans are much more lenient. In some cases, your score can be as low as 580 to qualify, so it’s worth speaking with your Realtor before assuming that owning a home is not in your future.

4. YOUR INCOME WILL DETERMINE THE AMOUNT YOU CAN BORROW – Again, much like your credit score, your current income is obviously a factor but it’s not the only factor. Plain and simple, your debts play a huge role in the size of your loan, so if you only make about $45,000/year but have zero debt, you might qualify for a larger loan than someone who makes $65,000 and owes a significant amount of money.

5. THE DOWN PAYMENT IS THE ONLY UPFRONT COST – Buying a home is clearly a large financial investment and may well be the biggest one you ever make. While you may already feel a bit overwhelmed by your down payment, it’s important to exercise a bit of prudence when establishing the amount of money you’ll need to save.

Although some sellers will cover your closing costs, depending upon the market, they may not cover anything at all. If this happens, you’ll want to be prepared. From there, moving is not cheap and neither are repairs or design changes. Make sure you have an emergency fund in place and plan for extenuating circumstances such as a job loss or sudden illness. You can never be too prepared.

6. A REAL ESTATE AGENT IS A REAL ESTATE AGENT – Some people incorrectly assume that all real estate agents bring the same types of things to the table but this couldn’t be further from the truth. For starters, a real estate agent is very different from a Realtor because Realtors are held to a higher ethical standard than conventional agents. With that being said, much like any other industry, some Realtors have more experience and provide better service than others.

When selecting someone to represent you during the buying process, it’s important to choose a Realtor who not only knows the local community, but who has experience in other beneficial disciplines such as marketing or negotiation. Plain and simple, a great Realtor is someone who not only understands how to market your offer to sellers, but who also knows how to get you the best deal possible.

7. THE SELLER WILL MAKE REPAIRS BASED UPON THE INSPECTION REPORT – It would be nice if all home owners agreed to this, but that’s not always the case. A lot of sellers wind up operating within a “take it or leave it” mentality, so you might have to consider hiring someone to do any repairs after the fact.

While some sellers may offer you cash-back credits for your monetary burden, if they are fielding multiple offers, chances are good that they will go with the buyer who does not ask for repairs to be completed.

At the end of the day, a great Realtor will work with you so that you have no misconceptions about the buying process. When selecting the right Realtor, consider their level of experience but do not discount their level of honesty and integrity.

If you’re looking for representation during the home buying process or would simply like a bit of advice, I am here to help. Please call me at 678-778-6551 or email me at HelloPamEvans@gmail.com.

Pam Evans | Hello Pam Evans Real Estate | www.HelloPamEvans.com | 678-778-6551